The British site The Paper interviewed personal finance influencer Ismail El Yacoubi, originally from Morocco, who studied and invested from a young age in the UK. At 26, El Yacoubi manages a portfolio of 120 thousand pounds, around 140 thousand euros, mostly in ETFs, with the aim of not having to rely on his pension when he stops working.
In his story, some tools emerge that are available to people investing in the UK and that make personal finance simpler and more profitable. Often the Italian equivalents are too complex for the private user, due to very stringent limitations and complex bureaucracy.
How an influencer invests
The interview with Ismail El Yacoubi begins with his education, financed with the inheritance left to him by his father, a lawyer in Morocco, who died when his son was only 16 years old. During his career at Oxford Brookes, El Yacoubi began to build both his portfolio and his career as an influencer by talking about personal finance.
Ismail El Yacoubi’s strategy
El Yacoubi immediately explains his objective in the interview. No millionaire’s income, not even a Fire (Financial Independence, Retire Early), a strategy that aims to create a return high enough to be able to stop working at a very young age. Simply, his aim is not to have to rely on the state pension once he reaches the age where he can have it.
For this reason, he first saved 40 thousand pounds by working as an engineer, and then dedicated himself to content creation. He then developed a relatively low-risk strategy:
I invest the majority of my funds in low-cost, diversified exchange-traded funds (ETFs), such as the Vanguard FTSE Developed World, which represents 85% of my portfolio, the Vanguard FTSE Emerging Markets, and the WisdomTree Megatrends ETF.
However, a significant part of his investments is dedicated to the Isa, the British tax-free savings account, into which he pays 20 thousand pounds at the beginning of each tax year.
What is an Isa in the UK and how does it work
Isa stands for individual savings account. Through this instrument, UK residents can invest their savings up to a maximum of 20 thousand pounds per year (which will drop to 12 thousand from 2027), without paying any tax on financial returns, income or dividends derived from those funds. There are four types of Isa:
- Cash Isa, a zero risk savings account, but with low interest;
- Stock & Shares Isa, which allows you to invest in shares, ETFs, funds and bonds;
- Lifetime Isa, reserved for young people and designed as a pension fund.
- Innovative Finance Isa, for riskier P2P investments.
Is there an equivalent of the Isa in Italy?
The Isa is reserved for UK residents. In Italy there are PIRs, individual savings plans. They resemble Stock & Shares Isas in the sense that they are tax-free and allow you to invest in traditional financial instruments. But the similarities end there. In fact, Pirs have many small limitations:
- you can never have more than 200 thousand euros in a single account, Isas are however unlimited;
- at least 70% of investments must be in Italian or European companies based in Italy;
- the tax exemption is valid after 5 years of investment restrictions, while for Isas it is immediate;
However, one of the most important limitations of PIRs is bureaucracy. In fact, experts recommend always relying on a bank or a financial advisor to open one, given that the process is very complex. The Isa can be started by an individual without any particular procedures.
